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Oct 03, 2014

Public Council meets at Russian Railways to discuss high-speed transport in Russia

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A meeting of Russia's Public Council has been held at the headquarters of Russian Railways.

In attendance were representatives of the executive and legislative authorities, heads of subjects of the Russian Federation, representatives of foreign governments, industry, the business community and the scientific and expert community.

The Russian Railways' delegation to the Council meeting was headed by Alexander Misharin, the Company's First Vice-President.

The Public Council on High-Speed Transportation in Russia discussed issues relating to the construction of the Moscow – Kazan High-Speed Main Line.

"We are making sure that the project has already reached a certain stage in its implementation and made considerable progress with regard to its economic viability. The regions are actively involved in all this work," said Alexander Zhukov, Chairman of the Council and First Deputy Chairman of the State Duma of the Russian Federation.

"It is important that the project pays for itself multiple times over. The tax effect is 3.8 trillion roubles. The project's developers opted for deep localisation: we will build our own railway lines and ride on our own trains. The project has taken into account these inter-sectoral feedback loops that create a very important positive impact on economic growth," said Sergey Glazyev, Advisor to the President of Russia, in his address to the Council.

The creation of a high-speed transport network is part of the socio-economic development of the Russian Federation, the updated Transport Strategy of Russia and the General Scheme for the Development of the Rail Network. Overall, these documents provide for the construction of more than 4,200 km of high-speed lines (with speeds from 200 to 400 kph) and almost 7,000 km of fast lines (140 to 200 kph) by 2030.

As Alexander Misharin noted, all the work to justify the Moscow – Kazan High-Speed Main Line has now been completed and on 30 September 2013, Russian Prime Minister Dmitry Medvedev approved a network plan and timetable of activities.

"The justification for investing in the project has been developed, and approved by Glavgosekspertizy Russia. An independent audit of the technical solutions and cost of the project has been carried out with the participation of international experts. This audit confirmed the investment justification in terms of the technical solutions and cost. In addition, a project investment memorandum and the tender documentation for the design phase of the main line have been prepared," said Alexander Misharin.

The participants noted that a consortium of leading Russian institutes had calculated the macroeconomic effects from developing High-Speed Main Lines, which far exceed the investment in their construction. These research results have been confirmed by Russia's Ministry of Economic Development. In the first 12 years of their operation, the Russian Federation's aggregate GDP growth due to agglomeration effects resulting from increased labour productivity and greater activity in the non-primary sectors of the economy will be 11.7 trillion roubles in projected prices. The amount of additional tax revenue in this period will be 3.8 trillion roubles, which exceeds by multiples the cost of the project's implementation. Under the proposed scheme, the project fully pays back the investment made both by the state and by private investors.

Following the session, the Public Council recommended that the draft budget of the Russian Federation allocate funding of 6 billion roubles in 2015 to conduct the engineering research and initial design of the Moscow – Kazan High-Speed Main Line.

The Council noted that the Russian federal budget has already allocated a line item to finance the line, which will have be to fulfilled. In the event of a positive decision by the Russian government to finance the project, the Council recommended Russian Railways to start the surveying and begin developing the planning documents and project documentation.

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